Deep tech finally gets money for the awkward middle years

Outset Ventures is going after the most expensive blind spot in New Zealand’s startup system. The Auckland deep-tech investor is halfway to a $50 million target for its new Momentum Fund I, with NZ Growth Capital Partners (NZGCP) anchoring with $10 million. Unlike its first two funds, this one skips the lab bench and backs companies at Series A and B, the point where the science mostly works but the business is still too risky for conservative capital.

That stage is where New Zealand has historically let high-value companies stall, sell early or move offshore. A fund built specifically for it is good news, and overdue.

The science is proven, the cheques are not

General partner Angus Blair describes the target companies as “typically… post-revenue and showing early signs of commercial traction”, where in most cases “the scientific and engineering risk will have been reduced”. In other words, these are firms that have survived the part that kills most deep-tech ventures and now need serious, patient money to build factories, win international customers and hire at scale.

This is the third rung on a deliberate ladder. Back in 2023, Outset had already deployed 80% of its original fund across 23 companies in future food, industrial chemistry and medtech. Fund II, which closed oversubscribed in 2025 at $41.5 million against a $30 million target, leaned towards follow-on rounds, with Sir Peter Beck on the investment committee. Momentum completes the sequence from seed to scale.

The pipeline is fatter at the top, thinner at the bottom

The headline venture numbers look healthy. New Zealand venture investment hit a record US$350 million in 2024, up 53% on the previous year. In 2025, NZGCP reported H1 investment of $361.7 million, with early expansion and expansion stages swallowing 84% of it.

But more money is not the same as more companies. University of Auckland Professor of Entrepreneurship Rod McNaughton points out that only 47 new companies were funded in 2025, against 51 in 2023, even as capital invested rose 61%. “The money is rising much faster than the intake of newly funded firms,” he says. “New Zealand doesn’t just need more investment; it needs it across the pipeline’s stages, especially where it may be narrowing.”

Momentum does not fix the intake problem, and it isn’t meant to. What it does is protect the companies already in the system from the second failure point: running out of local capital just as they become valuable. For deep tech, which needs bigger cheques and longer runways than software, that failure point arrives sooner and hits harder.

Why deep tech deserves the bet

The sector has been punching above its weight for a while. Back in 2023, deep tech took 38% of total capital funding in New Zealand’s tech sector, ahead of software at 30%, according to NZTE.

Outset’s portfolio shows why. HeartLab, Toku Eyes, Zenno Astronautics, Foundry Lab and Zincovery are all building hardware or hard science for global markets. Fusion startup OpenStar reached superheated plasma on roughly $10 million, a fraction of what government fusion programmes elsewhere have spent over decades. As Blair put it in 2025, “We’ve got really capital efficient businesses down here, and so it goes a remarkably long way.”

Capital efficiency gets a company to proof of concept. It does not get it through a $30 million manufacturing scale-up. That is the bill Momentum is designed to help pay.

Rocket Lab was luck, the next one shouldn’t be

Outset works out of Future House in Parnell, the former Industrial Research Limited site where a young Peter Beck tinkered with rocket technology in the basement in the 2000s. New Zealand got one deep-tech champion out of that building largely through individual drive and eventual access to offshore money. The three-fund structure is an attempt to turn that accident into a repeatable process.

The fair caveat is where the money comes from. NZGCP has backed all three Outset funds, and roughly a third of Fund II came from international high-net-worth investors, many of whom had relocated here. Momentum is structured to qualify under the Active Investor Plus visa framework, so migrant capital will again matter. That says more about the shallowness of domestic private capital than about Outset’s model, and it is precisely the kind of investment the AIP settings were meant to attract.

What happens next

Outset still needs to raise the remaining $25 million, and no first investments have been named. The test will be whether Momentum can keep its best companies headquartered here through their Series B rather than watching them redomicile to California at the first big term sheet. If it does, New Zealand finally has a domestic route from lab to scale, and the next Rocket Lab will not need quite so much luck.

Sources

• NZ Herald: Outset Ventures takes different tack with $50m Momentum Fund I (2026-10-21)
• NZ Herald: Outset Ventures has raised another $41.5m to invest in startups (2025-05-26)
• TechCrunch: Rocket Lab backer Outset raises $25M to fund New Zealand’s deep tech moonshots (2025-05-27)
• NZTE: Solutions Insights – October – Deep-tech (2024-09-26)
• NZGCP: Young Company Funding Report – Spring 2025 (2025-05)
• University of Auckland: Start-ups need more support (2026-05-26)
• Outset Ventures: Momentum Fund